Tough Times Don't Mean
Tough Luck on Salary

You've prepared for your next job interview by researching the company, brushing up on your sales pitch and pressing your suit. But one key task remains: Figuring out what to expect as compensation.

In a tough economy, you don't have a lot of wiggle room when it comes to negotiating base salary, says
David Wise,
senior consultant at Hay Group Inc., a global management-consulting firm.

But, just like any rule, there are exceptions. If you have the kind of skills that are in short supply and are critical to a business's bottom line, employers are often willing to pay "above and beyond the market average," says
Ravin Jesuthasan,
global practice leader at Towers Perrin, a Stamford, Conn.-based consulting firm.

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More on pay

How do companies really determine salaries for new hires? It's a complex web of surveys and research.

Employers are also increasingly sweetening job offers for high-demand candidates, with benefits previously reserved for workers already in the company, such as flexible schedules and work-from-home arrangements, says
Kenan Abosch,
leader of the compensation consulting practice at Hewitt Associates Inc., a provider of human-resources services based in Lincolnshire, Ill. "If a company has someone they're really hot to get, because it's a pivotal role, they'll go the extra mile," he explains. College graduates who fall into this category may be enticed with iPods, laptop computers and other perks, he adds.

How can you tell if your skills are in demand? The answer varies by industry. For example, executives with global outsourcing experience are highly sought after at consumer-goods companies, because more employers are outsourcing their manufacturing overseas. And risk-management professionals are on the most-wanted lists of food concerns due to recent historic increases in commodity prices.

Max Donley,
vice president of human resources at MedImmune Inc., says, "Compensation [restrictions] would be taken off the table" in negotiations for a senior director of cancer biology, a job that's been open for six months. "It's a very high-demand position in the biotech industry, and very few people have the skills required to be successful in this role."

A global oil and gas company recently hired a business-development executive at a salary "significantly above the market average because of his exceptionally strong negotiating and selling skills," says
Michael Wing,
a recruiter for executive-search firm Loewenstein & Associates Inc. in Houston. "There are few candidates at the middle-management level with this skill set."

If you have a unique background, be sure to highlight that in your r&eacute;sum&eacute; and cover letter, advises Mr. Abosch. "Make it easy for an employer to spot," he says. "Interviewing for a job today is as much about marketing as it is about background and experience."

When You're Underpaid

What if you earn less than the market average? This can happen if you've been working at one company for a long period of time, while gaining mostly modest merit increases. In this instance, your chances of securing a salary offer from another firm that's commensurate with the market average are slim, says Rick Slayton, president of Slayton Search Partners, an executive-search firm based in Chicago that recruits for a variety of industries. What's more, your lower price tag won't boost your odds of winning a job, he adds. "It usually is not a huge factor in the decision of who gets the job because there are enough other factors that will push a company one way or another," he explains.

To get ahead, underpaid professionals may need to change jobs more than once over a short period of time, suggests Mr. Slayton. "They have to look at this as a two step proposition," he says. "They have to get themselves closer to the market average in one move and they'll likely have to move again three to four years later to get themselves to a competitive compensation level."

What if you lack the kind of expertise that employers are bending over backward for? To gain negotiating leverage, you first need to understand how salaries are set. Employers typically start out by reviewing pay surveys from consulting companies and executive-search firms, says
David Insler,
a senior vice president at Sibson Consulting, which specializes in human resources, benefits and compensation consulting. (Sibson doesn't collect or sell pay data.) These show the lowest and highest salaries for a position, plus the average and median, by industry, career field, company size and region. They also look at years of experience and education required as well as the responsibilities of the job.

Consulting firms generally collect data by distributing lists of jobs to employers and requesting the information, usually in exchange for a free or discounted copy of the survey. Submissions are closely scrutinized for errors and figures that seem out of whack.

If you're eager to get your hands on the surveys that employers use, prepare to pay a bundle -- and to get far more information than you probably need. Consider, for example, a recent report on information-technology jobs from consulting firm Mercer LLC: It cost $3,075 for nonparticipants and covered 270 positions at more than 1,800 U.S. companies.

Even if you did get a coveted peek, employers mainly use the market averages shown in survey data for benchmarking against a candidate's current pay, says Mr. Wise. "Most [employers] start with what you're making now and provide something above that to entice you," he says. If you're making a lateral move, expect something between what you make now and a 10% increase, Mr. Wise says. "But if it's a bigger job, it's reasonable to expect something in the 15% to 20% range." On the other hand, if you're already earning an above-average salary, employers might bristle at that kind of increase and look for someone more affordable.

Another trick job-seekers can use is to do their due diligence on the scope of the job's responsibilities, says Mr. Wise. For example, some chief financial officers "are really nothing more than controllers, while others participate in strategic discussions with the executive team or they may play an operational role," he explains. "The bigger job is the one that's going to receive more pay." For this reason, he warns job candidates to be clear on a position's responsibilities when evaluating its pay.

"Before you take a similar-titled role at another place, you better understand what the job's responsibilities really are because a title won't always capture those nuances," he says. "You have to make the job bigger through something you bring to the table in order to justify a larger pay package."

Where else can you flex your negotiating muscles? You might have bargaining power when it comes to securing a sign-on bonus. Employers are generally more open to negotiating these because they're one-time payments, explains Mr. Wise. "It's absolutely appropriate to ask for a sign-on bonus to help you seal the deal, especially if you're leaving a job in the middle of the year and leaving a partially earned bonus on the table," he says.

To increase your odds of securing a sign-on bonus, offer to tie it to how you perform in your first six to 12 months on the job, suggests Mr. Insler, adding that more employers are considering or using these arrangements. You'll have grounds for negotiating a bigger sign-on bonus than someone who doesn't promise employers a return on their investment, he says. You'll have to deliver -- or your bonus will likely be rescinded.

Finally, remember that there's more to a job than the amount of money it pays, notes Mr. Wise. "Things like work-life balance, personal development opportunities and an organization's culture can be far more important than any extra 10% to 15% increase in pay."

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